The Evolution of Activism

“Activism” is a provocative term; it gets your attention. “Investor Activism” is no different.

When there’s a personality behind the phrase, like that of aggressive, outspoken shareholder Carl Icahn, a media lightning rod who often uses his position as a stakeholder to impress his desires on a business, it’s easy to see why investor activism has been spending a lot of time in the headlines recently.

As a component of investor relations, activism has always been important, but thanks to the combination of activists getting more aggressive more frequently, and increased media coverage of such incidents, it’s become more prominent. The number of activist campaigns against companies has dramatically increased in the past few years (see graph), which got us thinking: how has activism changed? And what are the characteristics today’s activists are seeking in a potential target?

Earlier this year, Ipreo released a special report on Investor Activism in which we looked back at how things have changed over the past few years. We found that there are a number of misconceptions about the way activists work, particularly in regards to the kinds of companies they target.

Using recent examples of activist activity, such as ValueAct’s campaign against Microsoft, the aforementioned Icahn’s bid to takeover Dell, and JANA’s involvement with Agrium, the special report punctures some myths about Investor Activism and sheds some light on what activists are truly looking for in 2014.

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